Alabama joins national mortgage settlement

Published 4:03 pm Monday, February 13, 2012

By NICOLE LOGGINS / Staff Writer

Alabama has joined a $25 billion national mortgage settlement; Attorney General Luther Strange signed the Joint State-Federal Mortgage Settlement on Feb. 9.

“This agreement not only provides much-needed relief to Alabama borrowers, but it also puts a stop to many of the bad behaviors that contributed to the mortgage mess in our state and across the country,” Strange said.

Alabama’s estimated share of the settlement is $106,701,096, according to the national mortgage settlement website.

The agreement was announced with the nation’s five largest servicers including: Bank of America Corporation, JPMorgan Chase & Co., Wells Fargo & Company, Citigroup, Inc. and Ally Financial, Inc. The five banks service nearly 60 percent of the nation’s mortgages.

Both state and federal agencies established that the servicers have executed improper lending practices and improper foreclosures. As a result, the banks have agreed to the settlement that will assist homeowners who may have been hurt by any wrongdoing in the market.

Vice President for Corporate Communications at Wells Fargo Home Mortgage Tom Goyda said the settlement agreements might give borrowers a new outlook on the housing market.

“At the high level, we think the agreements represent a restored confidence within the housing market,” Goyda said. “We agreed to make a one-time payment and once that’s made, we don’t have a role in dividing that up, the states decide that.”

Alabama borrowers who lost their homes due to foreclosure and encountered servicing abuse from Jan. 1, 2008 through Dec. 31, 2011, may qualify for a total of $20,595,756 in payments.

“The programs under the agreement apply to about 20 percent of the loans we service and own,” Goyda said. “We’ll be putting those programs in place starting on March 1. Buyers can contact us now to start the process and learn if they are eligible for the programs.”

According to the press release issued from the Attorney General’s Office, the value of refinanced loans to Alabama’s underwater borrowers would be an estimated $29,751,516. The state will receive a direct payment of $26,474,753 directed to the Attorney General’s Office.

Borrowers will not immediately know if they are eligible for relief, due to the complexity of the mortgage market. The settlement will be executed over the next three years.

“We have seen a lot of foreclosures,” realtor Pam Ausley said. “We hope that they will take those off the market, which would help us.”

Ausley works at Remax in the Inverness Corners location and said that foreclosures affect multiple aspects of the housing market.

“If all the buyers are looking in one area, and they know there is a foreclosure in that area, they all go after it and people who are selling have to come down to the price and wait,” she said.

“I can’t see how (the settlement) won’t help our market. It’ll still take a little while to get us back to normal,” Ausley said. “It’s really been picking up since late fall and December, activity is picking up even though prices aren’t.”

“The foreclosure process takes several months before the house goes back on the market,” she said.

To learn more about the mortgage settlement visit